Artificial intelligence adoption in the UK financial services sector has grown significantly, with 75% of firms now using AI, according to a survey by the Bank of England and the FCA. However, nearly half of these firms admit to having only a “partial understanding” of the technologies they are deploying, raising questions about responsible implementation.
Key Findings
- Increased Adoption: AI usage is up from 58% in 2022, with an additional 10% of firms planning adoption by 2026.
- Knowledge Gaps: While 75% are using AI, 46% report only partial understanding, particularly in cases involving third-party tools (33% of use cases, up from 17% in 2022).
- Automation Levels: 55% of AI use cases involve automated decision-making; only 2% are fully autonomous, with the majority involving human oversight.
- Use Cases: Top applications include data analytics, anti-money laundering (AML), fraud detection, and cybersecurity.
Key Challenges and Risks
- Top Risks Identified: Firms highlight data privacy, quality, security, and bias as key concerns. Risks related to third-party dependencies and model complexity are expected to grow.
- Regulatory Constraints: Data protection and privacy laws, alongside rules on resilience and cybersecurity, are seen as major barriers to AI expansion.
Despite the challenges, AI is increasingly recognized for its potential to enhance efficiency and security within the financial services industry. However, the survey underlines the importance of improving understanding and oversight as reliance on these technologies deepens.
